2022 Session Review

The 2022 legislative session adjourned on time and has concluded for the year. The investments made by lawmakers will greatly increase our success in the hospitality industry this year. Your government affairs team worked tirelessly during another virtual session to advocate on behalf of the industry, and we delivered.

In addition to $367 million in relief that passed this year, we were able to defeat bills that would have made it harder for hospitality businesses to thrive in Washington. Your input and response to actions alerts made a huge difference and helped defeat multiple bad bills this year. Below is a summary of the legislative session detailing impactful bills and wins for our industry.

Legislative WINS:

Industry Relief

$160 million passed 2ESSB 5693 – Supplemental budget

• $100 million – Hospitality Business Grants will be administered by the Department of Commerce, similar to the Working Washington Grants offered last year. We will work with the Department of Commerce to develop the application process.
• $15 million – Of the $100 million, $15 million is specifically reserved for hotels that were impacted by the eviction moratorium and suffered losses in the form of unpaid stays, legal fees and room damage.
• $20 million – A grant provided for the Washington State Convention Center.
• $20 million – Additional Working Washington grants, specifically for businesses and non-profit organizations in the arts, heritage and science sectors, including those that operate live entertainment venues.
• $20 million – Added to the Working Washington grant program, directed at businesses that sustained losses due to the pandemic. Eligible businesses must have 2019 gross revenues under $5 million. $12 million is directed at qualifying businesses who maintained operations throughout the pandemic, $8 million is directed at qualifying businesses to reopen.

$200 million passed ESSB 5873 – Providing unemployment insurance relief
This bill extends last year’s relief by capping the social tax at .5%, which will provide a savings for every business. Similar to last year, ESD will reissue rate notices to take effect prior to first quarter payments. The bill also provides relief to small businesses with fewer than 10 employees, capping their social tax calculation at rate class 7.

$7 million passed 3SHB 1359 – Temporarily reducing liquor license fees
This bill reduces liquor license fees for restaurants, hotels, nightclubs, distilleries, wineries, breweries, plus additional licensees from April 1, 2022 to Dec. 31, 2023.

Taxes

Defeated SB 5371 – Sugary Beverage Tax
This bill would have added a $.0175-per-finished-fluid-ounce tax on sugary beverages (soda products, juices, etc.) to fund public health services and health equity initiatives. This tax would have almost doubled the cost to purchase a five-gallon bag of soda concentrate. With the help of members, we were able to defeat this proposal in the Senate Health Care Committee.

Defeated SB 5513 – Expanding flexibility of existing lodging taxes for affordable workforce housing
Local government was back again this year looking to raid needed local tourism funding for general government purposes and again we were able to block their attempts. We worked with the sponsor of the bill to identify other funding sources (contained in SB 5868), to protect local tourism funds.

Passed SB 5868 – Expanding the use of the rural counties public facilities sales and use tax to include affordable workforce housing
After our opposition of SB 5513, we worked with the bill sponsor to identify alternative funding sources for affordable workforce housing. The bill expands the use of a local taxing option for economic development for the infrastructure for affordable workforce housing. We supported the alternative approach and the bill passed.

Employment Law

Passed 2SSB 5649 – Modifying the Paid Family and Medical Leave program
As originally introduced, the bill made technical changes and modifications to the program that were supported by the Washington Hospitality Association. After the surprising news the first week of session that ESD provided to the Senate Ways & Means Committee, that the program would become insolvent unless an appropriation was made into the fund, we worked to insert significant accountability measures and oversight. The bill as passed will require an immediate actuarial audit, creates a temporary taskforce, establishes permanent actuaries inside ESD, and requires an in-depth audit to the Joint Legislative Audit and Review Committee.

Defeated EHB 1837 – Ergonomics
This bill would have lifted the 20-year prohibition on the Department of Labor and Industries’ ability to adopt rulemaking on ergonomics in the workplace. Legislation was passed in the early 2000s to adopt an ergonomics rule and it ended up costing businesses hundreds of thousands of dollars to try to implement. In 2003 there was an initiative to overturn the rule and it was passed by the people of Washington. This legislation, as amended, directly targeted our industry at a time when we still need relief.

Because of you and your engagement in our action alerts, we were able to defeat this piece of legislation. Thank you!

Defeated SHB 1763 – Independent medical examinations
This bill would have allowed an employee undergoing an independent medical exam to record their meeting with a provider on behalf of their workers’ compensation representative. Patients are prohibited from recording appointments with providers in the medical system. This piece of legislation failed to make it out of the House before the House of Origin Cutoff.

Defeated SSB 5835 – Relating to workers’ compensation
This bill would have removed the wage calculation requirement that an injured worker be married to receive additional benefits when they are receiving payments for permanent or temporary disability. SB 5835 failed to make it out of the Senate.

Defeated SB 5801 – Concerning attorney and witness fees in Industrial Insurance Court Appeals
This agency-requested legislation would have required employers who appeal an L&I ruling to pay for all attorney and witness fees on behalf of the employee if the court ruled in favor of the employee. This would have added barriers to an employer’s ability to appeal a decision. Currently, these costs are paid out of the medical and accident aid funds that are already paid by state-insured employers.

Defeated 2SHB 1076 – Allowing qui tam actions on behalf of the state
This bill would have allowed third-party “relators” to bring a lawsuit against a business for any alleged labor violation, rather than utilize the current Labor and Industries Agency – and entire state agency with an annual taxpayer-funded budget in the hundreds of millions. The bill stayed in House Rules Committee this year and no action was taken.

Passed SHB 1794 – Reimbursement of fees if a paycheck is not accepted
This bill will require an employer to pay any fees that an employee accrues if their paycheck bounces because of insufficient funds. We were able to secure language that protects an employer if for some reason the financial institution makes an error. This bill passed with unanimous support.

Business Operations

Defeated SB 5903 – Providing multimodal transportation options at drive-up services
SB 5903 would have required operators with a drive-thru to allow pedestrians, bicyclists and other nonmotor vehicle modes of transportation to use the drive-thru. If that lane is determined unsafe for pedestrians or bicyclists, the operator would have had to provide an alternative lane for those guests.

Defeated SB 5559 – Concerning verification for use of paid sick leave
This bill allowed employees to take more than three days of sick leave without providing a doctor’s note if the employer did not offer a health insurance plan as an employee benefit that paid at least 85% of the cost of the insurance.

Defeated HB 1909 – Misbranding of meat and poultry
This bill would have required retailers to provide specific labeling for meat, poultry and finfish, and display the country of origin. While our industry usually is not the target of legislation like this, the definition of “retailer” was concerning. This bill failed to make it out of committee.

Defeated HB 1698 – Banning latex gloves in food establishments
HB 1698 would have prohibited the use of latex gloves in food establishments starting January 2024. This bill failed to make it out of the House Rural Development, Agriculture and Natural Resources Committee.

Failed to Pass SB 5658 – Postconsumer recycled content
SB 5658 failed to make it out of the Senate Environment, Energy, and Technology Committee. If passed, this bill would have required food service packaging, like clamshells and single-use cups, to meet a recycled content standard by 2030. The Association spent significant time on this during the interim and will continue to monitor as this issue will likely return next year.

Defeated SSB 5697 – Extended producer responsibility
This bill would have created a product take-back program for packaging that is sold into or distributed into the state. As introduced, the bill would have required all covered products to be reusable, recyclable, or compostable by Jan. 1, 2030. We had great concerns about how this would impact our foodservice packaging and the to-go nature of our businesses.

Defeated 2SHB 1850 – Consumer data privacy
Like the last several years, the House introduced a different version of Consumer data privacy than the Senate’s SB 5062 (the Washington Hospitality Association is neutral on SB 5062). The bill differed significantly from the Senate version and included a private right of action as well as significant fees that would have impacted our industry. We opposed the bill and it failed to pass this year. This policy will likely be introduced next year as well.

Defeated E2SHB 1258 – In-home kitchens
This bill would have allowed food businesses that are considered a microenterprise, to prepare, cook and sell food out of their home. This bill would have also allowed these small businesses to operate a food business with exemptions from the food code.

Failed to Pass HB 2035 – Establishing a behavioral health prevention and equity framework for the Liquor and Cannabis Board
HB 2035 intended to significantly alter the lens in which the Liquor and Cannabis Board made all policy decisions, past, present and future. The current LCB mission is to promote public safety and trust through fair administration, education and enforcement. Or industry supports and believes in this mission. Adding another layer of framework that prioritizes behavioral health and equity could have been detrimental to further our policy goals within the LCB.

Amended Bill WINS

Most of our wins come in the form of bills we support that pass and bills we oppose that are defeated. Some of our wins, however, are bills that as introduced could cause a great deal of harm to our industry. Through active engagement with lawmakers, we’re often able to get amendments adopted to these bills that move us to a neural, or even a support position.

In other words, sometimes bills pass that while they may not be exactly what we want, the outcome is much better compared to the original proposal.

Amended E2SHB 1799 – Food waste reduction/commercial composting
As originally drafted, HB 1799 would have prohibited the use of green, brown and beige in logos, color schemes, tinting, labeling or images on foodservice packaging that did not meet the state’s compostability requirements. Our team was successfully able to remove this provision of the bill and make key changes to the enforcement and fines of this legislation. As passed, businesses that reside in a jurisdiction that offers curbside compost pick-up and meets a certain waste threshold in 2026 will need to pay for composting services.

Amended ESHB 1619 – Appliance efficiency standards on commercial ovens in the year 2024
Because of concerns we had on the tight timeline on the new standard and the supply chain challenges we have seen with new equipment because of the pandemic, our team was successful in adding language that allows the Department of Ecology to delay this deadline.

Amended E2SSB 5600 – Concerning the sustainability and expansion of state registered apprenticeships
This bill aimed to increase the number of state registered apprenticeships and bolster the current programs. Despite our efforts, this bill failed to contain federal reciprocity upon final passage. However, significant changes were made to this legislation. If our federal program is approved at the state level, we have access to grant funding. The bill also includes an amendment that changes how a living wage is defined. Originally it said if you had a state-registered apprenticeship program you had to make sure that your apprentices earned a living wage before your program was approved. It is now defined as “working toward” a living wage. The association will continue to work with Labor and Industries to get the Hospitality Sector Registered Apprenticeship program approved in Washington.

Amended SHB 1706 – Providing restrooms to truck drivers
This bill will now require Washington State Ports to provide restroom accessibility to transportation professionals. As originally introduced, this would have added a civil infraction to retailers and employees who did not allow drivers to use the restrooms. As we know, if a retail establishment has a food permit, access to a restroom is already required. We were able to remove “retail” from the bill to avoid duplicate enforcement.

Other Bills

Passed ESSB 5761 – Wage and salary information to applicants for employment
This bill will require employers to list wage/salary range and a description of benefits on job postings. The bill will take effect January 1, 2023.

Failed to Pass ESSB 5459 – Business and occupation tax deduction for credit card processing companies.
A Department of Revenue audit several years ago asserted that credit card processing companies were required to remit B&O tax on the funds that facilitate transaction, despite the fact they already pay the tax on the fees they retain, and the business pays the tax on the money they receive. This decision could potentially impact businesses in the form of higher processing fees. We worked to introduce a bill this year that excluded these types of transactions from the double tax, but the bill failed to move out of the House Finance Committee.

Passed E2SSB 5764 – Concerning apprenticeships and higher education
This bill establishes course requirements for state-registered apprenticeships ensuring degree pathways. Starting July 1, all currently-registered programs and future programs must also create opportunities for degree equivalencies in conjunction with completing a registered apprenticeship program.

Failed to Pass ESSB 5671 – Modifying the composition of the Liquor and Cannabis Board
ESSB 5671 would have changed the composition of the Liquor and Cannabis Board from three to five members, plus four non-voting ex-officio members of the Legislature. After working closely with the LCB over the last few years, we did not engage in this legislation. If conversations surrounding this topic emerge in the interim, we will likely participate.

Failed to Pass 2SHB 1157/ SSB 5390 – Increasing housing supply through the growth management act and housing density tax incentives for local governments
These bills would have required jurisdictions to plan for additional housing types and consider housing locations in relation to employment locations, required urban growth areas to include at least six units per acre and required cities and counties to adopt housing targets. It also would have authorized counties and cities to establish a real estate excise tax density zone. We will continue to support legislation that aims to create more affordable housing for our workforce.

Failed to Pass SHB 1782/ SSB 5670 – Creating additional middle housing near transit and in areas traditionally dedicated to single family housing
These companion bills also focus on incentivizing local jurisdictions to make zoning changes to shift away from single family zoning, but they emphasize increasing affordable housing supply in areas close to public transportation. Sadly, these measures also failed to cross the finish line this session but will be heavily worked in the interim to finesse them for next year.

Failed to Pass HB 1734 – Concerning the taxation of low proof beverages
HB 1734 would have established a tax of $1.19 per gallon on sales of low proof beverages like canned cocktails and would have eliminated the spirits and liter tax on these products, including the on-premises preferential tax rate. This would have made canned cocktails available in grocery and convenience stores taxed at a significantly lower rate than when prepared on-premises.